Green growth and sustainable development

Ports: How to Get More Value for Money?

Remarks by Angel Gurría, OECD Secretary-General, delivered at the International Transport Forum: OECD Side Event on Ports

Leipzig, Germany, 22 May 2013

(As prepared for delivery)

Ladies and Gentlemen:

Welcome to the OECD’s Side Event at this year’s International Transport Forum (ITF) Summit. We are here to talk about a crucial topic: How to get More Value for Money from Ports.

Port-cities have dominated economic life across the world for many centuries. Cities like Antwerp, Genoa, Amsterdam, London and New York have all developed as capitals of global trade and finance, and centres of prosperity and influence. They became wealthy and contributed enormously to the economic advancement of their countries. And, as the point of contact for people from across the world, they also became centres of intense creative activity, art and cultural diversity, in addition to commerce.

Despite their rich history, many cities have seen their ports decline, both in the jobs that are related to shipping and in the secondary activities that flourish around ports. But ports still possess a great potential to serve as sources of economic and cultural vitality, particularly in an increasingly interconnected global economy.

Today, we are here to consider how to reinvigorate port cities and how to breathe fresh life into their economic and dynamic capabilities. Let me begin by sharing the OECD’s perspective on the value of ports.

Key drivers of economic growth

Ports give countries a competitive edge in international trade. They not only reduce trade costs for the host country, they also become global entry points and sources of growth and employment for whole regions.

Ports generate economic gains and create jobs in the short and long term. For example, we’ve found that in European regions, each additional million tons of cargo creates 300 new jobs in the port region in the near term. And, in all countries, on average, one million tonnes of port cargo is associated with 800 jobs.

Ports are associated with innovation in port-related sectors, for example, 9 of the top 10 regions in shipping patents are port regions. And port regions have important spill-over effects. In our study of Hamburg, for example, we found that one euro of additional demand in the Port of Hamburg leads to 0.71 euro of additional supply in the sectors that provide inputs to the port.

At the same time, ports also have their drawbacks. Negative impacts of port-related activities are localised and affect the attractiveness of the city. Where the port is located, pollution, noise, traffic congestion on major freight routes all affect the local population and can have important social consequences. Also, some ports have been slow in catching up with the latest technologies.

Making the most of our ports.

How can we make the most of our ports? How can we increase their competitiveness and turn them into sources of green growth and decent jobs?

The key is getting real and sustainable value added, in particular local value added, from the port. This is essential! Strategies to generate more value added include moving up the value chain in logistics and maritime services, as Hamburg has done, as well as waterfront or industrial development in port sites. Or combining modern maritime activities with historical heritage, as in Venice.

More and more ports are developing policies to mitigate negative impacts. Transport policies have been designed to increase the share of non-truck hinterland traffic. Environmental regulations and incentive schemes have reduced a variety of environmental impacts, and metropolitan master plans have allowed port relocations to free up centrally located urban land for other functions. The port city of Long Beach is as a good example of the new generation of green ports.

The OECD’s Contribution.

The OECD is helping countries to identify useful and effective solutions to maximize the benefits of ports. For example, two years ago, the OECD launched a Port-Cities Programme to provide governments with evidence-based policy recommendations on how to increase the positive impacts of ports.

Under the framework of this programme, the OECD has conducted a series of studies on port-cities around the world, such as Hamburg, Rotterdam, Marseille, Hong Kong and Durban. We’ll present our findings on these cities, and others, at our OECD Conference on Port-Cities this coming September in Rotterdam,. I want to take this opportunity to invite you all to this Conference.

Let me finally mention that we greatly value the ITF’s contribution to our work. The ITF’s publications, economic research and policy analysis strengthens our ability to identify good practices from across the world to advance the future of ports. Also, by bringing together key political, business and civil society decision-makers each year at its Forum, the ITF enables us to enrich our transport policy recommendations to drive economic growth, environmental protection, social inclusion and the preservation of human life and well-being.

Ladies and Gentlemen:

Ports are the nervous system of global trade. Over 80% of world cargo (by volume) is transported by sea. Our efforts to raise the efficiency, competitiveness and sustainability of ports can help boost trade, growth and jobs. It can also help us to promote green growth and development in the poorest regions.

I'm confident that the collaboration between the ITF and the OECD can make a solid contribution to advance in this direction. I am sure that we will have a most interesting discussion, and I look forward to our continued work together to ensure port-cities play a key role in the global system and are central to our efforts to further sustainable and inclusive growth.